Natural Gas forecast for the week of January 2, 2018, Technical AnalysisNatural gas markets initially were bullish during the week, but then rolled over to fill that gap and beyond. After that, we got an inventory number that was in line with expectations, and then shot through the roof. However, longer-term traders know better.
Natural gas markets initially gapped higher, pullback to fill that gap, and then shot to the upside. We are currently testing the $3.00 level, which has been important more than once. I think the given enough time, we should see a selling opportunity, but you may have to look at the daily charts to find that. I would not be interest in buying this market, I believe that currently we are seeing a bit of a knee-jerk reaction to the cold temperatures in the Northeast and that is typically a short-term driver. However, we have not been able to keep most of the gains through the season, so I think it’s only a matter of time before warmer temperatures in New York will turn things around. I believe that the $2.50 level underneath is the massive floor in the market, so I don’t expect to see this market break down below there anytime soon. However, I don’t expect to see the market rally for very long, so therefore I’m on the sidelines and waiting for an opportunity to go short.
It will be interesting to see how the next couple of weeks play out, but I think that the more pertinent traders will simply wait for an opportunity to take advantage of what has been a very negative outlook over the last several months. Be patient, you should be able to punish the natural gas traders again, as the oversupply continues to be a major long-term issue for pricing.